BREAKING – $32 BILLION BP CHARGE; HAYWARD OUT: BP this morning named Bob Dudley as its next chief executive officer and said it would take a pre-tax charge of $32.2 billion to cover oil spill costs, leading to a 2nd quarter loss of $17.15 billion … Outgoing CEO Tony Hayward will get an exit package worth about $1.5 million, according to CNBC. He will be nominated as a non-executive director at BP’s Russian joint venture.

Taken together, the exit terms suggest BP is not looking to excommunicate Hayward or lay the Gulf fiasco entirely at his feet.

BREAKING II – UBS BEATS, Bloomberg reports: “UBS AG … reported a third consecutive quarterly profit, beating analysts’ estimates on higher-than-expected trading revenue. Net income was 2.01 billion Swiss francs ($1.91 billion), after a net loss of 1.4 billion francs a year earlier, the Zurich-based bank said in a statement today. That beat the 1.12 billion-franc median estimate of 11 analysts surveyed by Bloomberg News. UBS’s investment bank reported a smaller decline in trading revenue than the average of its competitors.” http://bit.ly/9JKfjT

SCHAPIRO TO PROMISE OPENNESS – SEC Chair Mary Schapiro speaks at a U.S. Chamber of Commerce panel on Dodd-Frank implementation today. Schapiro is expected to promise an “open process” for implementing the massive new law and to say the agency will seek input from business, regulators, consumers and investors as it drafts hundreds of new rules called for by the legislation. Other panelists at the event, which begins at 9:30 a.m., include former SEC commissioners Paul Atkins and Annette Nazareth and Financial Services Roundtable Chief Executive Steve Bartlett. Full agenda: http://bit.ly/c4AsJ6

INDUSTRY MINDMELD – Morning Money spent some time yesterday with a top Wall Street executive who has ties to the GOP but is fed up with both parties and Washington in general. He spoke of a trip to China in which government officials asked smart questions about keeping their growth rate near 10 percent while carefully deflating a housing bubble and making infrastructure investments. “And then I come back here and turn on the T.V. and look at the quality of debate in Washington. Where are the grown-ups?”

He said most of the Bush tax cuts should be allowed to expire to help battle the deficit. And he said he is not terribly enthusiastic about any of the would-be GOP candidates in 2012 but that Mitt Romney, an ex-banker, has the edge. He said the anger among his fellow CEOs at the Obama administration is real but that he wishes both sides would put down their rhetorical weapons. “We are all in this together,” he said.

HOT READ – TNR’s Noam Scheiber on the Elizabeth Warren debate: “According to two senior Senate aides-one whose boss favors Warren and the other whose boss would prefer an alternative-pretty much every Senate Democrat (and Independent) would find it agonizingly difficult to join a filibuster of Warren's nomination, which would mean opposing an outspoken consumer advocate at a time of deep anti-Wall Street sentiment. Simply put: hoping the president will choose another candidate-something that describes several Senate Democrats-isn't the same as opposing his eventual nominee. ...

“[T]here are indications that the other two [swing Republicans] are inclined toward Warren. Grassley has been supportive of Warren when she's appeared before the Senate Finance Committee as head of the congressional panel overseeing the financial bailout. He questioned Warren sympathetically during her testimony last Wednesday, and a Grassley spokesman told me the senator has ‘worked well with Ms. Warren in her current oversight and he appreciates that she hasn't been a rubber stamp for the administration and the fact that she's kept the Treasury Department's feet to the fire.’” http://bit.ly/aB4PKt

POWER OUTAGE – New York is fine. But we sympathize with all Washingtonians (including M.M.M., aka Morning Money’s Mom) who remain without power following Sunday’s big storms. Pepco now says it could be Thursday before all the lights are back on. http://bit.ly/9XC4Uf

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MULTI-NATIONAL IMPACT – This McKinsey study did not get much attention when it came out during the height of the debate on financial reform but it has some interesting numbers on the economic impact of U.S. multinational corporations. For instance, multinationals make up less than 1 percent of U.S. companies but account for 11 percent of private sector employment growth since 1990. In 2007, U.S. multinationals employed 19 percent of the private sector workforce. Full poll/executive summary: http://bit.ly/ciWLoO

DRAPER IN DOT MATRIX – WSJ’s “Speakeasy” blog rendered the leading Mad Man as he would look on the paper’s front page. http://bit.ly/9I7Ucc

MAD MEN NUMBERS UP, BUT NOT MUCH – LATimes’ Joe Flint reports: “About 2.9 million people tuned into to the premiere of season four of AMC's ‘Mad Men’ … Although that number is a record … it is an increase of only about 130,000 viewers from the Season 3 debut. Given the heavy hype for the show, that seems a little soft. However, ‘Mad Men’ also picks up a lot of viewers who record the series and watch it later, so a clearer picture of its audience size won't emerge from Nielsen until later in the week.” http://bit.ly/bf9XgK

TECH CANDY – If you plan to jailbreak your iPhone you can find apps on Cydia, via TechCrunch. http://tcrn.ch/d1pFYC

WASHINGTON CAN’T DO MUCH ABOUT “UNCERTAINTY” – A new study suggests little correlation between “uncertainty” about the direction of the economy and business decisions. http://bit.ly/cUdTsp

LARRY ELLISON IS TOP-PAID – WSJ’s Scott Thurm reports on pg. A1: “Larry Ellison, founder and chief executive of software maker Oracle Corp., topped the list of best-paid executives of public companies during the past decade, receiving $1.84 billion in compensation … Coming in No. 2 on the compensation list was Barry Diller, who received roughly $1.14 billion from IAC/InterActive and Expedia.com … Following Mr. Diller were Occidental Petroleum Corp. CEO Ray Irani at $857 million, Apple Inc.'s Steve Jobs with $749 million and, in fifth place, Capital One Financial Corp. CEO Richard Fairbank at $569 million. Four of the top 25 CEOs worked at financial companies, two on Wall Street: former Lehman Brothers CEO Richard S. Fuld, at No. 11 with $457 million, and former Citigroup Inc. CEO Sandy Weill, who ranked 19th at $361 million.” http://bit.ly/dng9EG

NEW CAPITAL RULES NEAR – NYT’s Eric Dash and Nelson D. Schwartz report on pg. B3: “[R]egulators reached a preliminary agreement Monday on new standards to reinforce the stability of the global financial system. Under the new requirements, banks would have to hold higher capital reserves and more cash on their balance sheets to cushion against unexpected shocks, though regulators have not specified a minimum amount. The rules, developed after lengthy negotiations among regulators on the Basel Committee on Banking Supervision, would not take effect for at least seven years. … A compromise was struck after private banks and regulators warned that raising capital standards too quickly could choke lending and economic growth. Bankers also fear that having to set aside more capital could reduce profits and ultimately result in lower bonuses for bank employees.” http://nyti.ms/bAGOYM

DRIVING THE DAY – The Dow is back in black for the year after yesterday’s 100 point rally, which came on extraordinarily light trading. Yesterday’s catalyst was a small glimmer of hope on new home sales. Today’s markets will be flavored by BP early as well as the S&P/Case-Shiller home-price index out at 9 a.m. and consumer confidence at 10 a.m.

ALSO TODAY – According to CongressDaily, the House Financial Services Committee will mark up legislation today to establish a licensing and regulation system for Internet gambling. Committee Chairman Barney Frank's bill would allow states and Indian tribes to opt out of the system, and would continue a ban on sports gambling over the Internet.

HAYWARD TO BE OFFERED RUSSIA POST – FT’s Ed Crooks and Catherine Belton report on pg. 1: “Tony Hayward … is expected to be offered a directorship at TNK-BP, the group’s Russian joint venture, when he leaves the multinational oil group in the autumn. No formal statement on Mr Hayward’s position was made on Monday night ... but people close to the company said his departure had been mutually agreed. … Mr Hayward is expected to be replaced by Bob Dudley, the New York-born managing director for the Americas and Asia.” http://bit.ly/bxrEOV

GOLDMAN HAD LITTLE AIG EXPOSURE – NYT’s Andrew Ross Sorkin reports on pg. B1: “Another document — released by the House Committee on Oversight and Government Reform — has gone unnoticed and might be even more important. It contains an e-mail message to Mr. Geithner, sent on Sept. 16, 2008, at 12:02 p.m., just as he and the board of the Federal Reserve were deciding to inject $85 billion into A.I.G., which they did several hours later. The e-mail message came from one of Mr. Geithner’s lieutenants, Brian Peters. In the message, Mr. Peters said that he had just spoken to Goldman’s chief risk officer, Craig Broderick. Mr. Peters spelled out his understanding of Goldman’s direct exposure to A.I.G. to Mr. Geithner. He said that Goldman’s ‘net exposure is $2.3 billion,’ but immediately added, “They have credit hedges of $2.5 billion, $500 million of which is internal, so they are roughly flat.” http://nyti.ms/92rZLs

ALSO DRIVING THE CONVERSATION:

FED OFFICIAL SAYS NO ACTION NEEDED – Federal Reserve Bank of Philadelphia President Charles Plosser spoke with Bloomberg Television’s economics editor Mike McKee about the outlook for the global economy. Plosser says that he sees no need for more monetary stimulus now while noting the fundamental strength in the economy. Video: http://bit.ly/aYLhvc

WHAT IS “SYSTEMIC RISK”? – WP’s Howard Schneider reports on pg. A11 that no one really knows: “The phenomenon is not fully understood. ‘We sort of know vaguely what systemic risk is and what factors might relate to it. But to argue that it is a well-developed science at this point is overstating the fact,’ said Raghuram Rajan, a former International Monetary Fund chief economist … A recent IMF paper described study of the field as ‘in its infancy.’ Still, some central bankers and regulators are devising ways to try to control systemic risk, and one of the things they are focusing on is its connection to fast run-ups in the prices of real estate or other investments, or a quick expansion of credit and lending.” http://bit.ly/bG4qm8

GOV’T BACKS ZERO DOWN LOANS – Fox Business Channel’s Peter Barnes reports: “With little fanfare, the U.S. government has rapidly become the nation’s top backer of mortgages that require little or no money down, with taxpayer guarantees on them surpassing $1 trillion earlier this year. … ‘Zero down’ mortgages as high as $1 million have been backed by the Department of Veterans Affairs, which by law offers most of its loans with no down payment required. Such ‘no money down’ jumbo loans were approved in higher-cost housing markets, VA officials said. The average VA loan is $207,000. The [FHA] alone has expanded loan guarantees to $865 billion in June, including some refinancings of existing loans – almost double the 2007 level – according to an agency report.” http://bit.ly/9JGXxc

DUDLEY HAS LONG TO-DO LIST – WSJ’s Guy Chazan and Monica Langley report: “As BP PLC's board approved Robert Dudley as the troubled oil giant's new chief executive, his to-do list includes overhauling a U.S. operation badly tainted by the Gulf of Mexico oil spill; mending fences with perturbed U.S. government officials; and possibly making further executive changes at the top of his own company. … Mr. Dudley had previously garnered attention as chief executive of TNK-BP, which he ran for five years from its creation in 2003 and which quickly became one of BP's most lucrative businesses. Now, in addition to mending political fences and his company's bruised image, many are calling for a root-and-branch overhaul of BP's U.S. business, another duty that would likely fall to Mr. Dudley.” http://bit.ly/aR85IC

** A message from GE Capital: GE Capital provides critical financing to thousands of small and medium sized businesses across the U.S., helping support jobs and local economies.